The dawn of the clean hydrogen economy — visualized
The world is betting big on hydrogen, which might just be the best way to eliminate fossil fuels from essential industries like aviation and steelmaking. But for hydrogen to actually decarbonize anything, it needs to be more or less emissions-free — “clean,” if you like.
Its availability also needs to dramatically increase. Today, clean hydrogen barely exists.
To be clear, the world does make a fair amount of hydrogen today. It’s just overwhelmingly dirty hydrogen, made using fossil fuels. Nearly all of the 95,000 kilotonnes of hydrogen produced each year comes from an emissions-intensive process called steam methane reforming, which uses fossil gas as its input.
Truly clean hydrogen, on the other hand, is made by passing water through electrolyzers powered by renewable energy. In theory, lower-carbon “blue” hydrogen can also be produced by outfitting steam methane reformers with carbon-capture equipment, but this approach is relatively unproven and of dubious cleanliness.
A handful of clean hydrogen facilities currently exist around the world, but they’re not yet operating on a large scale. Electrolysis is particularly tiny — the world’s total annual capacity is just 180 kilotonnes, equivalent to less than 1 percent of current global hydrogen production.
That picture could soon change. Thanks to recently adopted policies in the U.S. and the European Union that heavily subsidize clean hydrogen, as well as China’s ongoing leadership on the buildout of clean energy infrastructure, the pipeline of clean hydrogen projects under construction or consideration worldwide is now huge.
If you toggle the drop-down menu on the map above, you can see how plans to grow the production of clean hydrogen are taking off in countries around the world.
You can also see that most clean hydrogen projects are in the early stages. About 2,500 kilotonnes’ worth of clean hydrogen projects are either under construction or have locked down financing (shown as “in final stages” in the charts above), according to International Energy Agency data. A much larger tranche of projects that will add a cumulative 48,000 kilotonnes of capacity is in the earlier feasibility-study stage. And projects that would add more than 83,000 kilotonnes of capacity are just at the beginning of the process, in the concept stage.
The key questions about this project pipeline are, of course, when — and if — these facilities will actually get built.
On the “if” point, Michael Liebreich, a clean-energy analyst and long-time hydrogen skeptic, forecasts that fewer than one in 10 of the low- and zero-carbon projects planned today will be operational by 2030. The IEA, for its part, estimates that just 7 percent of planned renewables-fueled hydrogen production capacity will actually come online by 2030.
Most of the capacity that’s currently undergoing a feasibility study or in the final stages of development is slated to go online before the end of 2030. But it’s possible — and maybe even likely — that many of these projects will overrun their timelines. Large-scale project development is never easy, and even less so for what is essentially a new industry.
All told, Liebreich estimates that the world will have produced somewhere around 15,000 kilotonnes of low- and zero-carbon hydrogen by 2030. Over the same timeframe, IEA projects a more optimistic set of figures: 15,000 kilotonnes of electrolysis-based hydrogen and another 13,000 kilotonnes of “blue” hydrogen.
Even with the most conservative estimate, that’s a substantial increase over today’s totals — but still far from the goal of 90 million metric tons of low- and zero-carbon hydrogen by 2030 that was set by the Hydrogen Energy Ministerial, a multigovernment initiative, as Liebreich points out.
One challenge to scaling clean hydrogen capacity that much, that fast, is that doing so also requires the world to scale up production of the technology that underpins the entire emerging clean hydrogen economy: electrolyzers.
These machines pass water through a membrane that separates hydrogen atoms from oxygen atoms, and they are not a brand-new technology. But the electrolyzer supply chain is still taking shape.
The industry will also need to grapple with building or sourcing enough clean energy to run these machines. Electrolyzers are extremely power-hungry: The IEA estimates that between 44 and 90 gigawatts of renewable energy will be dedicated to hydrogen production over the next four years.
Despite the difficulties, the puzzle pieces have started to come together for the supply of clean hydrogen to grow, even if the exact speed and scale of that growth remains a question mark. The generous U.S. subsidies — estimated by some to be worth hundreds of billions of dollars — have made it inevitable that the world will soon have much more clean hydrogen than it does today.
But who exactly is going to buy all of this fuel once it’s available?
Ideally, only the industries for which direct electrification is not a viable option. If batteries or renewable electricity can do the job — for instance, power a passenger vehicle or heat a home — it doesn’t make sense from an economic or energy-efficiency perspective to bring hydrogen into the mix.
In the near term, the most promising anchor customer for clean hydrogen is the fertilizer industry, which, alongside oil refining, is one of the biggest consumers of conventional dirty hydrogen. Though more hydrogen is used for refining, analysts see fertilizer companies as more likely end users for clean hydrogen; oil and gas companies are less likely to voluntarily swap their fossil-fuel-based hydrogen for a version produced with renewable energy.
BloombergNEF, for its part, foresees exponential growth in total hydrogen demand starting in the 2030s, once much of today’s planned clean-hydrogen production capacity is online. It expects industries such as steelmaking, aviation and shipping to lead the way in terms of new demand as they begin to work clean hydrogen into their processes.
Industries like steelmaking may indeed prove to be key clean-hydrogen customers over the next decade. But getting to that point will require each of them to make big, expensive technological and process changes, and those changes may be slow going without additional policy support to bolster demand.
And the only way that outcome will help the planet rein in the climate crisis is if the hydrogen these industries eventually purchase is genuinely emissions-free.
Verdagy manufactures an advanced AWE electrolyzer system that has superior performance to almost any system in the market — high current densities and the largest membranes leading to higher hydrogen production, high efficiencies leading to lower LCOH, and wide dynamic range and fast turndowns to seamlessly integrate with renewables. In addition to its Silicon Valley factory, Verdagy operates its R&D and highly automated commercial pilot plants in Moss Landing, California, where it continues to advance its cutting-edge technology.